Will Dell pull the plug?

Rumors that computer manufacturer Dell is planning to dispose of a number of production facilities, including one located in Łódź, persist despite assurances from the company and the Polish government. The latest report, which appeared recently in The Wall Street Journal Polska, cited anonymous sources that claimed Dell planned to sell some or all of its factories within 18 months.

Some reports have claimed that Taiwanese firm Foxconn could purchase the Łódź factory.

When contacted, Dell spokesperson Rafał Branowski would not confirm or deny the rumors. "We do not comment on such speculation," he told WBJ, adding that media reports had failed to name the source of the information.

Dell is reportedly interested in unloading its production facilities in order to slash costs. Industry experts say that it is more efficient to outsource laptop production than to do it in-house.

The 35,000-sqm factory in Łódź cost €200 (zł.678) million and was launched in January 2008 with the aim of reducing supply time to European clients and improving service in the region. A third production line was opened in June, employing 600 people and bringing Dell's total payroll in Poland to 1,800. As a result of this investment, the firm is scheduled to receive around zł.133.5 million in state aid from 2007-2012, and the Polish government has recently announced a further €4.5 (zł.15.2) million in grants will be given.

Whether the rumors are true or not, the Polish market will see changes in the structure of foreign investment, said Marcin Nowicki of the Gdańsk Institute for Market Economics.

"Rising salaries will deter those investors who came to Poland because of low production costs. But a large market and an increasingly affluent society will make Poland an attractive destination for other investors," he said.